BARTON S. AMEY COMPANY, INC., )
vs. ) CASE NO. 86-3954
Respondent. )
Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on February 5, 1987, in Tallahassee, Florida.
For Petitioner: Lee L. Haas, Esquire
Baxter, Rinard and Winters, P.A. Post Office Drawer 2636 Clearwater, Florida 33517
For Respondent: Sandar E. Allen, Esquire
Office of General Counsel Department of General Services Room 452, Larson Building Tallahassee, Florida 32301
In June of 1986, Gwenda J. Haas-Amey filed a request for certification as a minority business enterprise with the Respondent, the Department of General Services. By letter dated September 4, 1986, the Respondent denied the request for certification. The Petitioner, Barton S. Amey Company, Inc., filed a Petition for Formal Hearing challenging the Respondent's denial. The Petition was filed with the Division of Administrative Hearings on October 6, 1986, and was assigned case number 86-3954.
At the formal hearing the Petitioner presented the testimony of Lloyd E. Ringold, Gwenda J. Haas-Amey and Barton S. Amey. Petitioner's exhibits 1-2 and 4-8 were accepted into evidence. Petitioner's exhibit 3 was rejected.
The Respondent did not call any witnesses. Respondent's exhibits 1-3 were accepted into evidence. Respondent's exhibits 1 and 2 were ordered sealed.
The parties have timely filed proposed recommended orders. The Petitioner also filed a Memorandum of Law. The proposed recommended orders contain proposed findings of fact. A ruling on each proposed finding of fact has been
made either directly or indirectly in this Recommended order or the proposed finding of fact has been rejected in the Appendix which is attached hereto. In the Appendix it has been indicated where proposed findings of fact which have been accepted have been made in this Recommended Order and why proposed findings of fact which have not been accepted have been rejected.
Whether Gwenda J. Haas-Amey has control of the management and daily operations of Barton S. Amey Company, Inc.?
The Petitioner, Barton S. Amey Company, Inc., began operating in November, 1983. The Petitioner is a Florida corporation.
The primary business of the Petitioner is the construction and renovation of commercial buildings.
Gwenda J. Haas-Amey and Barton S. Amey are the only stockholders of the Petitioner.
Dr. Haas-Amey and Mr. Amey are husband and wife.
Mr. Amey holds a bachelor's degree and master's degree in building construction.
Mr. Amey holds a class-A contractor's license from the State of Florida. He is the qualifying agent of the Petitioner.
Mr. Amey has over 10 years of experience in construction prior to the formation of the Petitioner.
Dr. Haas-Amey holds a B.S. degree, a master's degree and a doctorate degree in early childhood education.
Dr. Haas-Amey has taken 30 hours of courses in administration at the doctorate level.
Dr. Haas-Amey is not licensed in construction and has no direct work experience in construction prior to 1983.
Dr. Haas-Amey and Mr. Amey are directors of the Petitioner. They have been the only directors of the corporation.
Mr. Amey is the president of the Petitioner. Mr. Amey has always been the president of the Petitioner.
Dr. Haas-Amey is the secretary/treasurer of the Petitioner. Dr. Haas- Amey has always been the secretary/treasurer of the Petitioner.
From November, 1983, until approximately April 1986, Dr. Haas-Amey and Mr. Amey each owned 50 percent of the stock of the Petitioner.
In approximately April, 1986, Dr. Haas-Amey and Mr. Amey decided that Dr. Haas-Amey would own 60 percent of the stock of the Petitioner and Mr. Amey would own 40 percent of the stock of the Petitioner. Dr. Haas-Amey first
testified that she decided how the stock would be owned. Dr. Haas-Amey later testified that the decision as to the ownership of the stock was made by the directors of the Petitioner.
No evidence was presented to explain how 10 percent of the stock of the Petitioner was transferred from Mr. Amey to Dr. Haas-Amey, i.e., gift, sale, exchange, corporate reorganization, redemption.
Also in April of 1986, the directors appointed Dr. Haas-Amey as chief executive officer of the Petitioner.
No evidence was presented to explain what the legal duties or powers of the chief executive officer of the Petitioner are, i.e., by-laws, articles of incorporation, minutes of directors' meetings. Dr. Haas-Amey did testify that the president reports to the chief executive officer.
In June of 1986 the request for certification as a minority business enterprise was filed by Dr. Haas-Amey. The request is based upon Dr. Haas- Amey's minority status as a woman and her ownership of more than 51 percent of the stock of the Petitioner.
In the request for certification there was no indication that Dr. Haas-Amey is the chief executive officer of the Petitioner. It is only indicated that she is the secretary of the Petitioner.
Section VI(1) of the request for certification includes the following request:
Minority owners Possess Control over the Management and Daily Operation of the Business
Identify the person(s) responsible for the day to day management and operation of the company. List the major responsibilities for each person after their name.
In response to Section VI(1) of the request, the following answer was given:
Dr. Gwenda J. Haas-Amey - public relations, marketing, personnel, bidding review
Barton S. Amey - estimating, bidding/negotiations, production.
Either Dr. Haas-Amey or Mr. Amey can sign checks on the Petitioner's accounts. Both have signed checks. Dr. Haas-Amey signs most of the checks.
The Petitioner does not own much equipment. Dr. Haas-Amey has purchased a copier and a warehouse for the Petitioner. She is also purchasing a dump-lift truck for the Petitioner.
Dr. Haas-Amey's knowledge of the construction business has been obtained as a result of her marriage to Mr. Amey for the past 9 and a half years and 3 and a half years working for the Petitioner.
Dr. Haas-Amey's knowledge of business has been obtained in part from her experience as the manager of two day-care centers.
The Petitioner's business has grown since Dr. Haas-Amey became more active in the business.
Dr. Haas-Amey works full-time for the Petitioner and has no other full-time employment.
Mr. Amey is the technical construction expert of the Petitioner.
Prior to April, 1986, Mr. Amey made the construction decisions and Dr. Haas-Amey made the management decisions for the Petitioner. After April, 1986, Mr. Amey still makes many of the construction decisions.
Although Mr. Amey testified that generally Dr. Haas-Amey does not consult with him or vice versa, the weight of the evidence proves that they do consult with each other. When questioned about specific instances, Mr. Amey testified that they consulted.
Dr. Haas-Amey and Mr. Amey consult with other persons working for the Petitioner, including the secretaries, sub-contractors, laborers and field supervisors.
Dr. Haas-Amey and Mr. Amey spend about the same amount of time in the Petitioner's office and in the field. The vast majority of their time is spent in the office.
The Petitioner's office is located in Dr. Haas-Amey's and Mr. Amey's residence. Dr. Haas-Amey owns the residence. Mr. Amey is a co-signor of the mortgage on the residence.
Dr. Haas-Amey and Mr. Amey review daily progress reports from the field and verify whether progress payments should be made.
Since the 60-40 split of the stock of the Petitioner, Dr. Haas-Amey has signed contracts on behalf of the Petitioner. Prior to the split of stock, Mr. Amey signed, as president of the Petitioner, sub-contractor agreements and owner/contractor agreements on behalf of the Petitioner.
Dr. Haas-Amey reviews requests for bids, looks at competitors and decides whether to submit a bid. Mr. Amey estimates the cost of projects to be bid on. Dr. Haas-Amey reviews Mr. Amey's cost estimates and can make adjustments. Dr. Haas-Amey then submits the bid and conducts any negotiations.
Dr. Haas-Amey negotiates with sub-contractors and decides who to hire and fire.
The Petitioner has two part-time secretaries. They do the typing for the Petitioner.
Dr. Haas-Amey and Mr. Amey interviewed persons applying for the secretarial positions. Dr. Haas-Amey made the ultimate decision on who was hired.
Mr. Amey testified that a Mr. Hicks was hired as a field supervisor by the Petitioner. Dr. Haas-Amey and Mr. Amey interviewed Mr. Hicks and the other applicants. Mr. Amey testified that Dr. Haas-Amey made the ultimate decision to
hire Mr. Hicks. The problem with this testimony is that Mr. Hicks was hired in August of 1985. This was before the stock of the Petitioner was held 60-40 and before Dr. Haas-Amey was elected as the chief executive officer of the Petitioner. At that time the stock was owned 50-50 and Mr. Amey was the president of the Petitioner.
The evidence did not prove that Dr. Haas-Amey controls the purchase of goods, equipment, business inventory or services, the financial affairs of the Petitioner or the Petitioner's business accounts or that she has the authority to hire and fire. The Board of Directors of the Petitioner controls (has the power or right to act) the purchase of goods, equipment, business inventory and services, the financial affiars of the Petitioner and the Petitioner's business accounts, and has the authority to hire and fire. Dr. Haas-Amey and Mr. Amey are members of the Board of Directors of the Petitioner. Although Dr. Haas-Amey has been making some of the decisions concerning these corporate functions, she has done so as one of two directors of the Petitioner. A single director does not have the authority to make decisions on behalf of the entire Board of Directors. Therefore, her decisions have been made either with the tacit approval of the other director of the Petitioner, Mr. Amey, or her decisions were invalidly made because they were not made with the approval of both directors of the Petitioner.
Dr. Haas-Amey has knowledge of the finanical structure of the Petitioner.
Dr. Haas-Amey has the capability, knowledge and experience necessary to make some decisions with regard to commercial construction.
The evidence did not prove that Dr. Haas-Amey has displayed independence and initiative in conducting all major aspects of the Petitioner's business.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, this proceeding. Section 120.57(1), Florida Statutes (1986 Supp.).
The Petitioner seeks approval of certification as a minority business enterprise. The burden of proving such entitlement is on the Petitioner. Rule 28-6.008, Florida Administrative Code; Florida Department of Transportation v.
J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981); and Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So.2d
412 (Fla. 4th DCA 1974).
A "Minority business enterprise" is defined by Section 288.703, Florida Statutes (1985), as:
any small business concern as defined in subsection (1) which is organized to engage in commercial transactions, which is domiciled in Florida, and which is at least
51 percent owned by minority persons and whose management and daily operations are controlled by such persons. [Emphasis
added].
In this case there is no question that a "minority person" (Dr. Haas- Amey), as defined in Section 288.703(3)(f), Florida Statutes (1985), owns at least 51 percent of the stock of the Petitioner. The issue is whether Dr. Haas- Amey controls the management and daily operations of the Petitioner.
The Respondent has promulgated Rule 13-8.05(3), Florida Administrative Code, which sets out certain factors to be considered in determining the issue in this case:
An applicant must establish that the minority owners possess control over the management and daily operations of the business. The Department will consider the following factors:
Whether the minority owners have control over the purchase of goods, equipment,
business inventory and services needed in the day-to-day operation of the business.
Whether the minority owners have the authority to hire and fire employees.
Whether the minority owners have a knowledge of the financial structure of the business and control over all financial affairs.
Whether the minority,owners control business accounts - checking, savings, and other financial affairs.
Whether the minority owners have the capability, knowledge, and experience required to make decisions regarding that particular type of work.
Whether the minority owners have displayed independence and initiative in seeking and negotiating contracts, accepting and rejecting bids and in conducting all major aspects of the business.
The factors included in Rule 13-8.05(3), Florida Administrative code, can be grouped into three general categories. First, the minority person must have control over the purchase of goods, equipment, business inventory and services, control over all financial affairs and business accounts and authority to hire and fire. The term "control" has been defined as "to exercise authority over; direct; command." "Authority" has been defined as "the power or a right to command, act, enforce obedience, or make final decisions; jurisdiction." Webster's New Twentieth Century Dictionary, Unabridged 1980.
The evidence presented by the Petitioner proved that Dr. Haas-Amey has been making decisions with regard to the purchase of equipment and services for the Petitioner, the financial affairs of the Petitioner, and the hiring and firing of employees of the Petitioner and that she has been signing most of the checks drawn on the Petitioner's business accounts. The evidence does not prove, however, that Dr. Haas-Amey has the authority or power to make those decisions.
The Petitioner is a Florida corporation. It is therefore governed by the provisions of Chapter 607, Florida Statutes (1985). Chapter 607, Florida
Statutes (1985), provides the manner in which a corporation may be controlled. In particular, Section 607.111, Florida Statutes (1985), provides:
Board of directors; exercise of corporate powers.--
All corporate powers shall be exercised by or under the authority of, and the business and affairs of a corporation shall be managed under the direction of, a board of directors, except as may be otherwise provided in this chapter or in the articles of incorporation. If any such provision is made in the articles of incorporation, the powers and duties conferred or imposed upon the board of directors by this chapter shall be exercised or performed to such extent and by such person or persons as shall be provided in the articles of incorporation.
Section 607.121, Florida Statutes (1985), provides:
Director quorum and voting.--A majority of the number of directors fixed by, or in the manner provided in, the bylaws or, in the absence of a bylaw fixing or providing for M the number of directors, then of the number stated in the articles of incorporation shall constitute a quorum for the transaction of business, unless a greater number is required by the afticles of incorporation or the bylaws. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless the act of a greater number is required by the articles of incorporation or the bylaws.
The evidence in this case proved that Dr. Haas-Amey and Mr. Amey are the only directors of the Petitioner. The articles of incorporation and bylaws of the corporation were not offered into evidence. Therefore, the Petitioner has failed to prove that the corporate powers of the Petitioner are not to be exercised by Dr. Haas-Amey and Mr. Amey in their capacity as directors of the Petitioner. Because there are only two directors, they both must agree how to exercise the Petitioner's powers. Neither Dr. Haas-Amey or Mr. Amey has the power or authority to exercise the corporate powers of the Petitioner. Therefore, even though Dr. Haas-Amey has been making decisions on behalf of the corporation, such decisions have been made as a director with the tacit approval of the other director, Mr. Amey, or such decisions were invalidly made because they have been made without the approval of both directors of the Petitioner.
It is possible that Dr. Haas-Amey has made decisions on behalf of the Petitioner in her capacity as an officer of the corporation. The Petitioner, however, failed to prove that this is true. Section 607.151, Florida Statutes (1985), authorizes the selection of officers of a corporation, including "a president, a secretary, and a treasurer . . . " and "[s)uch other officers and assistant officers and agents as may be deemed necessary. . . ", and provides the following with regard to the authority of officers:
(2) All officers and agents, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the bylaws or as may be determined by resolution of the board of directors not inconsistent with the bylaws.
The evidence in this case proved that Mr. Amey is the president of the Petitioner and that Dr. Haas-Amey is the chief executive officer and the secretary/treasurer of the Petitioner. Although Dr. Haas-Amey testified that the president reports to the chief executive officer, no evidence was Presented to prove what the authority and duty of the president and chief executive officer of the Petitioner are as provided in the bylaws of the Petitioner or by resolution of the board of directors. Such evidence is crucial in this case because the President of a corporation normally is the chief executive officer of the corporation. In the absence of evidence as to the legal authority of the officers of the Petitioner, it cannot be concluded that Dr. Haas-Amey controls the Petitioner in her capacity as an officer of the Petitioner.
Based upon the foregoing it is concluded that the Petitioner failed to prove that Dr. Haas-Amey has the authority or Power to exercise the corporate Powers of the Petitioner. Although she may be making decisions with regard to Purchasing, corporate financial affairs and hiring and firing, it has not been proved that she has the requisi authority or power to be in control of those activities. The evidence also failed to prove that Dr. Haas-Amey has control over the Petitioner's business accounts. All the evidence proved was that she signs most of the checks drawn on the Petitioner's accounts. Mr. Amey also has the authority to sign such checks. Therefore, Dr. Haas-Amey does not control the Petitioner's business accounts.
Secondly, the minority person must possess knowledge of the financial structure of the business and the capability, knowledge and experience required to make decisions regarding the particular work of the business. The particular work of the Petitioner is commercial construction.
Dr. Haas-Amey and Mr. Amey are both capable, well- educated and intelligent people. Both evidenced knowledge of the financial structure of the Petitioner. In particular, Dr. Haas- Amey evidenced sufficient knowledge of the financial structure of the Petitioner.
Dr. Haas-Amey also has the capability, knowledge and experience required to make some of the decisions regarding commercial construction. The evidence did not prove, however, that Dr. Haas-Amey possesses the capability, knowledge and experience required to make all of the decisions regarding commercial construction necessary to operate the Petitioner.
Finally, the minority person must have displayed independence and initiative in seeking and negotiating contracts, accepting and rejecting bids and in conducting all major aspects of the business. Dr. Haas-Amey has displayed independence and initiative in seeking and negotiating contracts and accepting and rejecting bids. The evidence failed to prove that she displayed independence and initiative in conducting all major aspects of the business.
As concluded, supra, Dr. Haas-Amey has the capability, knowledge and experience required to make some of the decisions regarding commercial
construction which must be made for the Petitioner. Mr. Amey, however, makes many of the significant decisions. Although Dr. Haas-Amey and Mr. Amey referred to Mr. Amey's decisions as technical decisions, they are nevertheless significant decisions. Although there was testimony that Dr. Haas-Amey makes the final decisions, any suggestion that Dr. Haas-Amey can override technical decisions initially made by Mr. Amey is not credible. This conclusion is based in part upon a comparison of Mr. Amey's education and experience in the construction field with Dr. Haas-Amey's. Mr. Amey has earned a bachelor's degree and a master's degree in building construction. He also has approximately 14 years of experience in the construction field. From 1983, when the Petitioner was formed, until 1986 Mr. Amey made most of the decisions for the Petitioner. Compared to Mr. Amey's experience and education, Dr. Haas- Amey's education and experience in the construction field is limited.
The conclusion that Mr. Amey makes many of the significant decisions regarding the work of the Petitioner is further supported by the requirements of Chapter 489, Florida Statutes (1985). Section 489.119(2), Florida Statutes (1985), requires that a corporation which engages in contracting must apply for a license "through a qualifying agent." The application must show "that the qualifying agent is legally qualified to act for the business organization in all matters connected with its contracting business and that he has authority to supervise construction undertaken by such business organization." [Emphasis added).
Section 489.105, Florida Statutes (1986 Supp.), defines "qualifying agent" as follows:
(4) "Qualifying agent" means a person who possesses the requisite skill, knowledge, and experience, and has the responsibility to supervise, direct, manage, and control the contracting activities of the business entity with which he is connected; who has the responsibility to supervise, direct, manage, and control construction activities on a lob for which he has obtained the building permit; and whose technical and personal qualifications have been determined by investigation and examination as provided in this act, as attested by the department. [Emphasis added].
Although it is possible that Mr. Amey is not in compliance with the requirements of Chapter 489, Florida Statutes (1985), and has relinquished the responsiblities he is required to retain under the Chapter to Dr. Haas-Amey, it does not appear from the weight of the evidence that he has done so. Again, any suggestion that Dr. Haas-Amey's final decisions conflict with Mr. Amey's responsibilities as a qualifying agent are not credible.
Dr. Haas-Amey and Mr. Amey have distinct and separate responsibilities for the operation of the Petitioner. Their responsibilities necessarily overlap and require consultation between Dr. Haas-Amey and Mr. Amey. Although Dr. Haas- Amey may make the "final decision" it has not been proved that she has the authority to impose her decision on the Petitioner or that Mr. Amey's role in the decision-making process is as insignificant as suggested by some of the testimony.
Based upon the foregoing, it is concluded that the Petitioner has failed to prove that the Petitioner's management and daily operations are controlled by Dr. Haas-Amey.
Based upon on the foregoing Findings of Fact and Conclusions of law, it is RECOMMENDED that the Petitioner's request for certification as a minority
business enterprise be denied.
DONE and RECOMMENDED this 5th day of March, 1987, in Tallahassee, Florida.
LARRY J. SARTIN
Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1987.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3954
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted.
Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ."
1 Not supported by the weight of the evidence. See RO 41.
2 RO 24.
3 Not supported by the weight of the evidence. See RO 41.
4 RO 37, 39 and 40.
7 RO 23.
Ronald W. Thomas Executive Director
Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0950
Sandar E. Allen, Esquire Office of General Counsel Department of General Services Room 452, Larson Building Tallahassee, Florida 32301
Lee L. Haas, Esquire
Baxter, Rinard and Winters, P.A. Post Office Drawer 2636 Clearwater, Florida 33517
